Utica schools projects $22.5 million budget deficit for 2013-2014

More cuts could be imminent for Utica Community Schools after finance officials projected a $22.5 million budget shortfall for the 2013-2014 school year.

Stephanie Eagen, superintendent for business and finance, delivered her annual budget projections to the Board of Education this week.

Her message was familiar: Michigan’s second-largest school district will spend more than it brings in next year.

“Every year, the challenges become greater,” said Tim McAvoy, district spokeswoman.

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The Board of Education took no action in the wake of the report. Rather, the information was presented to “create an awareness” for elected officials that the shortfall most likely will require budget cuts over the next five months. Utica Community Schools must have its 2013-2014 approved by July 1.

For the past several years, Utica has addressed similar budget deficits with cuts in personnel, reduced employee benefits and in some cases, consolidation of services.

Last year, for example, when facing a shortfall of $10.6 million, elected officials approved the elimination of nearly 40 employee positions and hired a private company to provide custodial services.

Officials declined to speculate on possible cuts. Whatever recommendations made by Utica Superintendent Christine Johns and her administrative staff must be approved by the Board of Education.

McAvoy said district will remain committed to protecting what students learn in the classroom.

“Our strategy has been to make the necessary adjustments without impacting the core academic program,” he said.

Eagen based her budget assessment on projected revenue, expenses and enrollment figures. Because the district’s revenue is heavily dependent on state aid – 80 percent of Utica’s funds come from that source – Eagen acknowledged her projections come with “significant variables.”

In addition, Utica officials must negotiate with three major employee groups: teachers, administrators and para-professionals.

Utica anticipates revenue for 2013-2014 at $239.6 million and expenses of $265.3 million. An anticipated savings of $3.2 million because of restructuring in the state employees’ retirement system brings the projected operating deficit to $22.5 million.